What laws regulate work health and safety?
In the past, each state and territory had a different work
health and safety law. In 2009, the Workplace Relations
Ministers’ Council endorsed the introduction of national
harmonised work health and safety laws based on a Model
Work Health and Safety Act ('Model Act').
Laws based on the Model Act have commenced in the
Commonwealth (Work Health and Safety Act 2011), the
ACT (Work Health and Safety Act 2011), New South Wales
(Work Health and Safety Act 2011), South Australia (Work
Health and Safety Act 2012), Tasmania (Work Health and
Safety Act 2012), the Northern Territory (Work Health
and Safety (National Uniform Legislation) Act 2011) and
Queensland (Work Health and Safety Act 2011). Western
Australia is in the process of introducing the vast majority
of the Model Act, with the Work Health and Safety Bill,
The exception is Victoria, where the government has
stated that it will not be joining the harmonised model so
the Victorian Occupational Health and Safety Act 2004 will
continue to apply in that State.
There are work health and safety codes of practice
which provide practical guidance to support the Model
Act. These codes are not mandatory and an equivalent
means of providing the same level of health and safety
is acceptable. However, the codes of practice have
evidentiary value in court.
What must a company do?
Under the Model Act, a person conducting a business
or undertaking must ensure, so far as is reasonably
practicable, the health and safety of:
- workers engaged, or caused to be engaged, by the
- workers whose activities in carrying out work are
influenced or directed by the person, while the workers
are at work in the business or undertaking.
More specifically, a person conducting a business or
undertaking (PCBU) must ensure, so far as is reasonably
- the provision and maintenance of a work environment
without risks to health and safety;
- the provision and maintenance of safe plant and structures;
- the provision and maintenance of safe systems of work;
- the safe use, handling and storage of plant, structures
- the provision of adequate facilities for the welfare at
work of workers in carrying out work for the business
or undertaking, including ensuring access to those
- the provision of any information, training, instruction
or supervision that is necessary to protect all persons
from risks to their health and safety arising from work
carried out as part of the conduct of the business
or undertaking; and
- that the health of workers and the conditions at the
workplace are monitored for the purpose of preventing
illness or injury of workers arising from the conduct
of the business or undertaking.
What does 'reasonably practicable' mean?
The duty to ensure health and safety under the
Model Law requires an organisation to eliminate risks
to health and safety so far as reasonably practicable.
If it is not reasonably practicable to eliminate risks,
then the duty is to minimise those risks as far as
In determining what is ‘reasonably practicable’, it is
necessary to take into account and weigh up all the
relevant matters, including:
- the likelihood of the hazard or the risk
- the degree of harm that might result from the hazard
or the risk;
- what the person concerned knows, or ought reasonably
to know, about the hazard or risk and ways of
eliminating or minimising the risk;
- the availability and suitability of ways to eliminate
or minimise the risk;
- assessing the extent of the risk and the available
ways of eliminating or minimising the risk, the cost
associated with available ways of eliminating or
minimising the risk, including whether the cost is
grossly disproportionate to the risk.
Which 'workers' are covered?
The Model Act has a wider definition of the 'workers'
who are to be covered than existed under the former
State and Territory legislation. There is now a duty
to ensure the safety of the following 'workers':
- An employee
- A contractor or subcontractor
- An employee of a contractor or subcontractor
- An employee of a labour hire company who has
been assigned to work in the person’s business
- An outworker
- An apprentice or trainee
- A student gaining work experience, or
- A volunteer.
How does a director exercise 'due diligence'?
If a person conducting a business or undertaking has
a duty or obligation under the Act, an officer (which
includes a director) of the person conducting the business
or undertaking must exercise due diligence to ensure
that the person conducting the business or undertaking
complies with that duty or obligation. ‘Due diligence’
includes taking reasonable steps:
- to acquire and keep up-to-date knowledge of work
health and safety matters;
- to gain an understanding of the nature of the operations
of the business or undertaking of the person conducting
the business or undertaking and generally of the hazards
and risks associated with those operations;
- to ensure that the person conducting the business or
undertaking has available for use, and uses, appropriate
resources and processes to eliminate or minimise risks
to health and safety from work carried out as part of the
conduct of the business or undertaking;
- to ensure that the person conducting the business
or undertaking has appropriate processes for receiving and
considering information regarding incidents, hazards and
risks and responding in a timely way to that information;
- to ensure that the person conducting the business or
undertaking has, and implements, processes for complying
with any duty or obligation of the person conducting the
business or undertaking under this Act; and
- to verify the provision and use of the resources and
processes referred to above.
This is a positive duty which requires directors to be
proactive and means that they owe a continuous duty to
ensure compliance with duties and obligations under the
Model Act. There is no need to tie a director’s failure to any
particular failure or breach of the relevant person conducting
a business or undertaking for the director to be prosecuted.
Traditionally, the courts have held that an employer’s duties
are very high and, accordingly, the due diligence defences are
difficult to establish. The point has been made in a number
of cases that ‘all due diligence’ contemplates a ‘mind
concentrated on the likely risks’.
It has been recommended by Professor Jim Galvin ('Towards
zero harm', Company Director, April 2012) that:
“One of the most valuable leading
indicators that should feature in board
reporting is significant and near-miss
incidents. These provide free learnings
and increase an organisation’s awareness
and understanding of the risks it owns.”
Can a director be liable even though
'remote' from day-to-day operations?
The short answer is 'Yes'. By definition, directors become
further removed from day-to-day operations when
a company becomes larger as it is their duty to focus
on wider strategy and compliance, not to manage the
company. Nevertheless, liability can be attracted where
directors play even a limited direct role in the operation
of the business. This will happen where directors leave
the decision making to management but without at the
same time making consistent and on-going enquiries
aimed at ensuring that management was both capable
and competent of discharging the company's statutory
obligations as to safety (see, for example, James v Paul
(No 2) (2011) NSWIRComm 117).
What are the sanctions for breach of duty?
Under the Model Act, where a director commits a breach
involving recklessness to the risk an individual of death
or serious injury or illness, the penalty can be up
to a fine of $600,000 and/or five years' imprisonment.
For these serious offences, the prosecution must prove
that the conduct was engaged in without reasonable
excuse. ‘Reasonable excuse’ encompasses a concept
similar to reasonable practicability. This means that the
prosecution needs to prove beyond reasonable doubt
that the defendant exposed a person to risk where it was
reasonably practicable for the person not to have done so.
This document is part of a Director Tools series prepared by the Australian Institute of Company Directors. This series has been designed to provide general background information and as a
starting point for undertaking a board-related activity. It is not designed to replace legal advice or a detailed review of the subject matter. The material in this document does not constitute
legal, accounting or other professional advice. While reasonable care has been taken in its preparation, the Australian Institute of Company Directors does not make any express or implied
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